POYSHA INDUSTRIAL CO LTD.
OBJECTS & ACTIVITIES : Manufacture of a wide variety of containers ranging
from simple slip-cover cans used for cosmetic and other dry products to
friction top cans for paints, open top sanitary cans for fruits and
vegetables, and other precision-made containers. Metal cans, mostly decorated
and lithographed are manufactured by the Company in a variety of sizes and
shapes to meet the needs of the different products to be packed. The Company
also makes other light-gauge tin-plate and sheet metal products.
BRIEF HISTORY : Prior to 2nd July, 1957, Poysha Industrial Company was
carrying on the business of manufacturing tin cans and tin containers at
Sewri, Bombay, under a licence granted by the Government of India. The
Company also had an expansion licence and had imported automatic tin printing
and can-making plant from West Germany. On 2nd July, 1957, the Company was
incorporated and took over the business of "Poysha Industrial Company"
together with the imported machinery.
OVERALL OPERATIONS : Since June 1981, there was constant go-slow and
intermittent strikes by the workmen at the Company's Ghaziabad unit resulting
in very low and uneconomical level of production. As the situation
deteriorated, the Company had to declare a lay-off from 13th December, 1981.
The situation further worsened since then which compelled the Company to
close down this unit from 14th April 1982. The workmen at the Cochin unit
also resorted to go-slow and went on a strike in December 1981 which lasted
for about 3 months. An amicable settlement was reached in March 1982.
Production of metal containers and total sales during the year amounted to
1,157.18 lakh nos. and Rs. 22.32 crores respectively. There was only a modest
increase in profits. In 1982-83, in spite of the closure of the Ghaziabad
unit, sales turnover at Rs. 26.68 crores was higher by 19.5% over the
previous year due to the steady growth in the production levels maintained by
both Thane and Cochin units. Though sales increased, profits declined
substantially owing to the financial burden by way of standing charges and
closure compensation to employees in respect of the closure of Ghaziabad
unit. In 1983-84, the turnover declined by 19% to Rs. 21.57 crores due to
general sluggishness and non-availability of duty free raw material. However,
the working results showed improvement. In 1984-85 (17 months), with the
revival of demand from the major consuming industries, the Company achieved a
higher turnover of Rs. 39.42 crores. Higher production levels were achieved
both at Thane and Cochin plant and also as a result of resumption of
operations at Ghaziabad and commissioning of a new unit at Madras, both
during March 1985. Profits also showed a healthy growth. Outlook for the
availability of raw material (tin-plate and tin-mill products) was reported
to be good for the next three years and its cost was also expected to show a
downward trend. Profitability was therefore expected to show an improvement.
In view of the delay in the implementation of the expansion project,
financial institutions agreed to the Company's request to reschedule the debt
repayments so that the repayment of instalments would commence after the
working of the new units was stabilised. During 1985-86, turnover at Rs.
34.12 crores showed an increase of 23% over the annualised figure of the
previous year. Satisfactory working of the Ghaziabad and the Madras units
contributed significantly to the increased turnover. Profitability, however
declined owing to increased cost of labour and higher interest burden on
account of heavy capital investments made for the expansion and modernisation programmes. During 1986-87, production remained almost at the previous year's
level and turnover rose marginally to Rs. 36.83 crores. Despite this, the
Company suffered losses due to a steep rise in the cost of imported tin plate
by virtue of its scarcity in the international market and the adverse U.S.
Dollar-Rupee parity. In 1988-89 (18 months), there was satisfactory
improvement in the working results. Sales at Rs. 87.41 crores were higher by
58% over the previous year, when compared on an annualised basis. The Company
exported OTS can under the Duty Exemption Scheme for a total value of Rs.
8.08 crores. During 1989-90 (13 months), sales and exports amounted to Rs.
78.60 crores and Rs. 12.18 crores respectively registering increases of 33%
and 109% respectively on an annualised basis over the previous period.
However, profitability was affected by the hike in import costs and
prevailing competitive conditions. During 1990-91, turnover declined by 13.8%
to Rs. 62.55 crores due to restricted availability of tin-plates. The Company
exported OTS can under the Duty Exemption Scheme for a total value of Rs.
8.46 crores. Profitability was affected by high import duties. During 1991-92
(15 months), turnover further decreased to Rs. 33 crores on account of
continued liquidity crunch which adversely affected the availability of
material inputs. During the period, the Company entered into a conversion
arrangement with The Tinplate Co. of India Ltd., for supply of tinplate and
marketing of the finished products, utilising the Company's production
facilities for the manufacture of containers. The Company exported OTS cans
worth Rs. 1.71 crores under the Duty Exemption Scheme and metal containers,
printed sheets and components to the tune of Rs. 1.30 crores.
EXPANSION : In 1983-84, the Company drew an expansion plan of Rs. 435 lakhs
for the projects at Cochin, Madras and Calcutta. A factory shed was taken on
long lease basis for the Calcutta unit. The Madras unit was commissioned
during March 1985. The Company also installed side-seam welding bodymakers at
its Thane and Ghaziabad units to enable the supply of side-seam welded
containers to major customers from these locations. The entire imported
equipment was received and put to productive use except the equipment meant
for the Calcutta Unit. The Calcutta unit commenced trial production in August
JOINT VENTURE PROJECT : During 1983, the joint venture project, Containers
India Ltd. (CIL), being established in Tirupati, Andhra Pradesh for
manufacturing metal containers, showed good progress. Major items and
equipments were received and the unit was expected to go into commercial
production by the end of 1983. A total of Rs. 7.50 lakhs was invested by the
Company against the total committed equity/preference capital participation
of Rs. 8.25 lakhs. Containers India Ltd., commenced trial production during
In October 1985, one of the promoters proposed to divest his investment from
the equity capital of CIL. The consortium of financial institutions decided
to transfer the management of CIL to Bharat Metal Box, Hyderabad. Despite
protracted negotiations between members of consortium, Andhra Pradesh
Industrial Development Corporation (APIDC) and Bharat Metal Box Ltd.,
regarding the take over, the consortium's decision could not be implemented.
In January 1986, the Company was asked by the consortium to submit proposals
for rehabilitation of CIL. Meanwhile, the operations of CIL remaining
suspended for two years, its net worth was eroded and it came under the
purview of Sick Industrial Companies (Sp. Provisions) Act 1985.
COLLABORATION : In 1970-71, the Company entered into a collaboration with
American Can Co. During 1982-83, the Company received approval from
Government for the renewal of the technical assistance agreement.
SUBSIDIARIES : The Company holds all the 5,000 Equity shares of Rs. 100 each
of the subsidiary Colrige Ltd. The plant of this subsidiary remained closed
since 1st August 1976. Negotiations were in progress to dispose of this
company by way of outright sale of assets or shares. In 1982-83, the Company
sold its investment in the share capital of Colrige Ltd., to Maul Eastern
Ltd. In view of the disposal , Colrige Ltd., ceased to be a subsidiary of the
Kaira Can Co. Ltd., ceased to be a subsidiary of the Company with effect from
14th January 1978.
RIGHTS DEBENTURES : During July 1978, the Company offered secured redeemable
debentures of the nominal value of Rs. 50 lakhs by way of right debentures of
Rs. 1000 each to the existing shareholders. The rate of interest on these
debentures was increased from 11% to 12% with effect from 1st August 1981.
PARTLY CONVERTIBLE DEBENTURES : During August 1989,the Company offered
2,20,000 - 14% secured redeemable partly convertible debentures of Rs. 100
each on Rights basis in proportion 1 debenture: 10 equity shares held.
Additional 33,760 debentures were allotted to retain oversubscription.
Simultaneously, the Company also issued 11,000 - 14% secured redeemable
partly convertible debentures of Rs. 100 each to the employees (including
Indian working directors)/workers of the Company on an equitable basis. None
were taken up and unsubscribed portion was allowed to lapse.
Rs. 50 of the face value of each debenture was to be automatically and
compulsorily converted into 5 equity shares of Rs. 10 each on expiry of 6
months for the date of allotment of debentures.
Remaining Rs. 50 of the face value of each debenture was to be redeemed at
par at the end of 6th (Rs. 15) 7th (Rs. 15) and 8th (Rs. 20) year from the
date of allotment of debentures.
REDEMPTION OF PREFERENCE SHARES : The 35,000 - 9.5% preference shares were
due for redemption on 3rd May, 1980/83. With the consent of Controller of
Capital Issues, the Company increased the rate of dividend from 9.5% to 11%
with effect from 1st January, 1981 and extended the date of redemption to
31st December, 1992/95. However, 39 shareholders holding 1,230 shares opted
for redemption of their shares on 3rd May, 1983. The above said 1,230
preference shares were redeemed on 3rd May, 1983. Rate of dividend was
further increased to 13.5% from 30th May, 1983.
SICK INDUSTRIAL COMPANIES ACT, 1985 : During 1991-92 (15 months), the Company
became a sick industrial company within the meaning of Clause (O) Sub-section
(1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act,
1985. A reference was being made by the Company to the Board for Industrial
and Financial Reconstruction (BIFR) in accordance with the provisions of
Section 15 of the said Act.
REVALUATION OF FIXED ASSETS : The land, buildings and plant and machinery at the Thane, Madras, Cochin and Ghaziabad units were revalued as on 31st
August, 1986. The resultant surplus of Rs. 933.28 lakhs arising out of this
was credited to capital reserves.
GENERAL : As at 30th June, 1992, sums of Rs. 299.77 lakhs, Rs. 255.34 lakhs,
Rs. 48.24 lakhs and Rs. 260.75 lakhs were outstanding against the loans from
ICICI, IDBI, LIC and IFCI respectively.